Andrew Mountbatten-Windsor received private income from subletting three cottages on his Windsor Royal Lodge estate while paying a “peppercorn rent” to the crown estate, a report into royal property arrangements has revealed. The National Audit Office (NAO) review also shows that King Charles pays an “adjusted” rent from his private Duchy of Lancaster income, below open market value, for his disgraced brother’s non-working royal daughters, princesses Beatrice and Eugenie, to live in royal palaces.
Meanwhile, the Prince and Princess of Wales’s Forest Lodge home in Windsor underwent £400,000 repairs carried out by the crown estate before the couple moved in with their three young children last year. William and Catherine took out a 20-year lease in July on the Grade II-listed Georgian house, with gardens, paddock, a barn and three cottages set within 7.4 hectares, and pay £307,200 rent a year, reviewed every five years, the NAO said. They paid no upfront premium, and are responsible for internal refurbishments and alterations.
Details of the properties are revealed in the report, published on Friday, which will form the basis of the Commons public accounts committee’s inquiry into royal properties after the public outcry when it emerged in October Mountbatten-Windsor was paying a peppercorn rent on Royal Lodge, the Windsor mansion from which he was eventually evicted by Charles. The NAO found rent and lease arrangements for the royals differed depending on why the accommodation was required and whether the property was managed by the crown estate – a self-funding public corporation managing assets on behalf of the crown – or the royal household.
For those managed by the royal household, “adjusted rent” was typically 60% of the open market valuation because the properties are within a secure cordoned area requiring tenants to have security vetting. The rent for Beatrice’s St James’s Palace apartment is 68% of market value, while Eugenie’s Kensington Palace cottage is 64%. Charles also pays rent for Prince and Princess Michael of Kent’s Kensington Palace apartment, although there was no record of valuation of that lease prior to 2026.
Mountbatten-Windsor, now evicted to Marsh Farm on the Sandringham Estate, Norfolk, had a lease that permitted subletting, though it was not known how much he received through this. He paid a £1m premium and £7.5m on refurbishment of Royal Lodge under the 75-year lease in 2003, and could be entitled to between £301,967.66 and £488,342.21 compensation by surrendering it early, the report said. However, the crown estate has previously said it is likely he will not be owed any compensation once dilapidations are taken into account.
Sources suggested Mountbatten-Windsor’s subletting did not generate a profit and that the rent was set at a rate to cover only maintenance and running costs for staff living there. However, no figures, such as repair and household costs versus rental income, or copies of the rental agreements, have been made public. Norman Baker, a former Liberal Democrat minister, said the arrangements for Mountbatten-Windsor added “insult to injury … not only that Andrew was able to have a peppercorn rent for a gigantic property, but then to make potentially millions on the side from subletting properties. The money should have gone to the crown estate, not into [his] pockets”.
